HR Forecasting the heart of the HR planning process, can be defined as determining
the net requirement for personnel by determining the demand for and supply of human
resources now and in the future.
Forecasting activity can be subdivided into three categories:
1. Transaction-based forecasting focuses on tracking internal change
instituted by the organizations managers.
2. Event-based forecasting concerned with change in the external
3. Process-based forecasting not focused on a specific internal
organizational event but on the flow or sequencing of several work activities
(e.g. the warehousing shipping process)
- Forecasting is only an approximation of possible future states and is an activity that
strongly favours quantitative and easily codified techniques.
- Studies have shown that accuracy of prediction improves significantly when a variety
of forecasting techniques are used.
HR Forecasting in a Global Economy
Organizations that operate globally can have their global HR planning managers,
encourage employee collaboration through:
Maximizing use of technology such as e-mail
Explicitly scheduling work to take advantage of time zone differences
o Preparing a contract in advanced time zone, which can then be sent to a
client firm, in a time zone several hours behind
Elimination of redundant costs through centralizing data in the HRMS
HR Planning should be:
Strategic and forward looking
Comprehensive and encompass all employee groups and management
Tailored to the specific culture and attributes of the organization to which it is
being applied Benefits of HR Forecasting
1. Reduces HR Costs Effective HR Forecasting will allow organizations to
develop internal workers and obtain the best external recruits. This means
organizations will be less likely to have to react in a costly last-minute crisis mode
to unexpected developments in the internal or external labour markets.
2. Increases Organizational Flexibility
3. Ensures a close linkage to the macro business forecasting process
4. Ensures that organizational requirements take precedence over issues of
resource constraint and scarcity
HR Demand the organizations projected requirement for human resources
HR Supply the availability of workers to meet the demand requirement, obtained
either internally or from external agencies.
Why HR System Implementation Efforts Fail
1. The organizations top management has not communicated the need to
implement new technology or new systems.
2. People resist change efforts because they are not asked to help develop new
business strategies, solutions and plans.
3. Organizations underestimate the time, energy, budget and planning required to
successfully implement new technology.
4. Different groups within an organization either cannot agree on what a system
needs to do or overburden it with too many requirements.
Personnel Categories given more attention in forecasting process:
1. Specialist/Technical/Professional Personnel
Workers holding trade qualifications which are in high demand
Workers who require lengthy preparatory training for attainment of skill
As these workers are in high demand both in Canada and abroad, special
attention has to be given to programs to induce these workers to join an
Attention to benchmarking compensation schemes to meet or lead
industry standards to attract and retain people
Longer time to recruit because of the need for a more comprehensive and
larger geographical search for this specialist talent pool
2. Employment Equity-Designated Group Membership
Four designated groups:
o People of Aboriginal descent
o Womeno People with disabilities
o Members of visible minorities
3. Managerial and Executive Personnel
The organizations survival and future success depend directly on
succession and replacement planning.
Leaders who are able to transform organizational culture and anticipate
external change, and who possess the dynamic personal attributes
necessary to unify the organization, are very rare
Recruiting trainees is extremely important to the success of the
Organizations overall HR policies
1. Identify organizational goals, objectives and plans
2. Determine overall demand requirements for personnel
3. Assess in-house skills and other internal supply characteristics
4. Determine the net demand